US real estate recovers as hiring picks up

When real estate developer Joe Sitt went hunting for his latest property, he looked not to New York or London – two cities where his company, Thor Equities, owns upmarket retail spaces – but to Bellevue, Washington, a fast-growing Seattle suburb containing a workforce of more than 130,000 people.

Thor spent $87.5m last month to buy the Bellevue Galleria, a 200,000 sq ft retail and office centre whose tenants include Rock Bottom Brewery, Men’s Wearhouse and Bungie, the video game developer best known as the creator of Halo.

Mr Sitt is betting that the jobs and wealth created by booming tech groups and venture capital companies will generate “enormous potential” in places such as Bellevue.

The US commercial property market is stabilising as businesses begin to hire again, highlighting the role of job creation in the wider economic recovery.

Vacancies will decline up to one percentage point over the next year, with offices and apartments benefiting most as companies hire workers and Americans relocate for jobs, according to the National Association of Realtors. “The big question for the real estate market is, will the recovery continue?” asked Mr Sitt.

Despite increases in initial claims for unemployment insurance, job creation has been strong this year. The US economy added more than 200,000 jobs in April for a third straight month, a pace fast enough to keep up with population growth and reduce unemployment. Economists polled by Bloomberg expect the May report on Friday to show another 200,000 new positions.

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